Select Committee on Agriculture Minutes of Evidence

Examination of Witnesses (Questions 540 - 559)



  540. You have made some assumptions, presumably, on our ability to resume exports per se, and also, presumably, on the value of our currency, which has a significant impact on the viability of the export sector anyway.
  (Mr Bansback) Yes. On the currency point, we have had two or three years of a very strong currency, where, despite this, we have sustained still almost 30 per cent of our sheep going for export and between 15 and 20 per cent of our pig meat production going for export. If we had the opportunity for beef we would have been able to do it as well. So I think we have sustained, if you like, bad times from the currency point of view. In terms of being able to move back into exports, with the exception of certain companies, which were very specialised on exports and will be considering their position at the moment and may well not be able to survive over a period, other than that, our belief is that there will be a capacity to export and to resume exports.

  541. Turning, lastly, back to the home market, who are the key players in the supply chain whom you must persuade not just to nod at your plan and say, "That seems an interesting piece of paper" and file it, but instead demonstrate clear commitment, both in resource terms and in terms of their will to co-market with you?
  (Mr Barr) I think one has to take whole supply chain with you and I think one also has to remember that the demand chain—

  542. There are some key people to whom others will be looking to demonstrate some leadership.
  (Mr Barr) Yes. Obviously one has to take the industry with you. It has to be a collaborative thing. I have chaired a number of committees very successfully where we have made change in the industry, and, unless you can take people with you, you are going to find it very, very difficult. I think that one must also recognise, as we have mentioned here, that there probably is going to be more than one demand chain and there will be a secondary one, and one very much has to take every one with you because you are—as I think the programme says—the weakest link. We do not want weakest links; we have to take the whole group with us. In one way, I suppose, coming into it, if the MLC did not exist today you would maybe have to invent it, because we need someone in the middle here who can bring those various groups together and is trusted and is seen as an operation of integrity. It is nearly as if it was there for the occasion.

Mr Jack

  543. Just to follow that line of analysis in the context of the discussion that has taken place so far about the nature of the livestock industry in the context of foot and mouth, we seem to be trying to reconcile almost the irreconcilable. On the one hand we have companies like Tesco, operating with St Merryn Meat, big modern plants where the whole objective is to improve the meat offer, with animals moving, relatively speaking, long distances to this central location; and, in the context of foot and mouth, much criticism of animal movements over long distances. We are told, for example, that the sow had had to go to a plant in Essex because that was the only plant that could extract the maximum value for that particular type of animal. There has been a lot of discussion about should we localise, should we go back to a network of small scale, local abattoirs, local producers, local traceability, local everything. How do we achieve the type of objective you have set for the restructuring of the livestock industry, producing what the consumer wants, close control of the costs, against an agenda which may be moving in the opposite direction?
  (Mr Barr) I think you have probably been looking at my notes. That is the question. That is why not only do I want to address the whole thing to farming but I am trying to get world class experts from the outside as well. I am going to companies like major international players in logistics and so on and saying, "Let's worry this problem." If we take the food project, with which I know you are familiar, we borrowed resource from 80 international companies and we had 180 people working at one point—not paying for any of them, borrowing them—on problems. The reason I think we met every deliverable and every schedule and got things implemented was that we put in a lot of off-the-wall thinking. It is really a question I would like to answer at some future point because I do not know the answer to it. I am deliberately trying to come at this with a blank sheet of paper, because the danger is trying to patch up what you have. It might be that that is necessary—you know, to put patches on the dams—but my job is really to build another dam behind it. So we really have to find: Is there a better way to do things?

  544. I was very interested, having some understanding of horticultural industry, in the story you told of improving the quality of the tomato production in the way that you describe, because in my area we have an initiative called "Keep the Fylde farming" and it is about local production, local traceability, local quality standards; but equally we have an argument about the importance of the local livestock market as a clearing area for small scale, very variable product. There is a lot of attachment to this type of powerful local discussion against your picture of needing to do something nationally.
  (Mr Barr) That is why I said there is a two-tier market, in that part of the horticulture story was that people did not want to grow things like tomatoes on the vine and plum tomatoes and all the varieties, and there was a massive, massive import. Part of that exercise showed that there could be effective import substitution and we could do it. Equally, things came as side issues, like herbs. Herbs were virtually imported, but one found that a lot of the glass could be used for something like that, which is a massive growth industry. And a lot of niche players were identified and niche people were developed within that exercise. I certainly feel as if there is a very good case and we must not forget organic, we must not forget local—you know, there is an entitlement. I think, yes, there is globalisation and at best we must be in a global class, but there also is localisation and I think localisation would be very good in future.

  545. I want to move on now to part of your submission where you discuss the import policy of meat and just ask the simple question: Given that we could be self-sufficient in our different species, why should we import any meat?
  (Mr Barr) Would you like to answer that, Gwyn?
  (Mr Howells) Yes, certainly, and then perhaps Bob would like to join in. There is of course, as far as sheep meat is concerned, a seasonality issue, where our product is arguably not at its best during the January to March period when New Zealand lamb, particularly New Zealand chilled lamb, is able to come in and fulfil that market. Similarly, obviously as we have already heard, we are major exporters particularly of light lambs—this is particularly a Welsh issue, an issue for farmers in Wales at a particular time—and that is why it is important that we can recover the markets. But I think the general point is that there is this growth of the global marketplace with particular markets having peculiarities or interests—in particular cuts, for example—that are not attractive in this market. If we take the example of pigs and pig meats, we know that the trotters are a delicacy, for example, in the Far East, whereas, although they are beginning to be a delicacy in up-market London restaurants, it is wrong to say that there are major opportunities for that part. Shoulder meat, again for pigs, is a classic exported product, that, because we can no longer export pig meat, has come back on the market and actually has served to depress the price of pigs because of the lack of market.
  (Mr Bansback) Just to add to what Gwyn has said, there is the complementarity. An animal does not have a precise balance of cuts/products for a particular country, and therefore in pig meat, for example, we have a shortage of certain parts of the pig here (the loin for example, which is in very heavy demand), we have a surplus of other parts of the animal, and therefore we quite sensibly have an import and export trade. I think the other point is that, with the exception of New Zealand lamb, we are talking about trade within the European Union. That is what is happening in the pig meat and the imported beef sector.

  546. I would be interested to explore that further, but not now. In your document you say, commenting on foot and mouth, that in both cases there is a strong likelihood that imported meat was part of the cause, hence the line of my earlier questions. What recommendations are you going to make to the Government about improvements to the meat import regulations? Clearly you see that there is a threat. What do you want the Government to do to deal with it in the future? If I could add, are there any other nasties that you might by now have observed, other than foot and mouth, that could come in with imported meat that might present a threat to our livestock industry?
  (Mr Bansback) We have identified really two issues in terms of import controls here. One is to do with the level and the amount of veterinary surveillance at ports. We would simply like to ask the question: Are the checks sufficient? It is under the control of Customs & Excise, but is the regulation of these controls such that we are going to stand the best possible chance of picking up anything that is coming in through different sources. That is the first issue. The other point that we have referred to is this issue of personal imports through airports and ports, which we feel could be a loophole from some of the evidence and even the anecdotes that we have been hearing about coming in. We are very conscious that the countries that attach the same level of importance to animal health controls as we do, like America and Australia and New Zealand, do have stronger protection measures on personal imports.

  547. I am intrigued by the rather tentative way you are approaching this issue. You have got some extremely good contacts in the meat trade in the United Kingdom: at times some of the stories coming out of it made all our hair stand on end. But you said it would be a good idea to ask a question about these various things. Given your input and expertise—because I see that you have contributed a lot of expert staff, for example, to deal with foot and mouth issues—are you not going to be more proactive in using all your expertise actually to make some firm recommendations to Government about what it ought to do rather than simply asking the question to Government: "Should you not look at this?" Do you not feel you have a more proactive role to play?
  (Mr Barr) As I say, I have only been under four weeks here, but we have, within our competence, tried to express things which we feel should be brought to your attention. Obviously we feel that this is a first appropriate step at this time. At the end of the crisis one must see what lessons have to be learned. But we certainly felt about it sufficiently seriously to feel it should be brought to both your attention and Government.

  548. Let me take you to another sentence in your report. You do decide to give a very clear steer to Government about the State Veterinary Service. It says, "We believe that the current outbreak has highlighted again the need for adequate resourcing of the State Veterinary Service." So you obviously believe that currently the staffing is inadequate. Perhaps you would like to expand a little bit on that and tell us what you perceive are the inadequacies and what you think ought to be done.
  (Mr Barr) I think we have probably covered it in that statement, and we have drawn to Government's attention. At this moment in time, I have maybe made the wrong decision but I have seen that the MLC's priorities now are to give practical nuts and bolt help to our stakeholders, and that should be one of our biggest concentrations. The next concentration is very, very much that we must not get too dragged in to the immediate crisis, we must get on with the recovery plan and very much our energies at this moment in time must be the recovery plan, and I am sure, like everyone else, we will be analyzing what has happened but just now it is going to be absolutely that recovery plan.

  549. I agree with that, but we would not be where we are if there had not been a fault somewhere in the defence mechanism. The question I ask also—because I am told by veterinary experts that there are other livestock diseases which are not, thankfully, in the United Kingdom but which could come here—is as to whether in fact we should be also shoring up the defences at the same time that we are recovering, because the last thing that we want is another outbreak of this. Because you say also in your report, talking about the review, that "This review should include an effective surveillance role throughout the country including the involvement of veterinarians across the spectrum." I mean, who else ought to be involved in the surveillance exercise about meat imports to this country? Because there is a huge amount of public scepticism that stuff coming into the United Kingdom is not looked at by anybody; it is merely let in by paper checks. Somebody or someone has brought in something which has caused millions of pounds worth of damage to our livestock industry, huge hardship, billions off the tourist industry. We are talking big bucks here.
  (Mr Barr) Not once but twice, if we include Classical Swine Fever.

  550. Yes.
  (Mr Barr) I mean, all I can say at this point is I totally agree with you. I can assure you that we will very, very much press that case.

  551. Are you going to use your expertise in hazard analysis to look at the holes in the ring-fence round the country over food imports and make some firm recommendations?
  (Mr Barr) Speaking personally, I must understand more clearly, because of course one of the things that I cannot pretend to be fully up to pace with yet is the European aspect, because so much of ours already comes through Europe. So in a sense there is a European position on this whole thing. But, obviously, with two such serious outbreaks in such a short time, you have assessed what must be a very major priority.

  552. My final question under your heading in your report, Issues for Government, The Importance of Exports to the Industry. We have touched on those. Perhaps you would like to say a word or two about how you see the role of Government in trying, if you like, to improve the question of market access for our exports of meat products in the United Kingdom.
  (Mr Bansback) I think there are two things in particular. I think, firstly, we have to get exports moving again. For that to happen, we need to pursue the legislation that exists under the EU, regionalisation policy and exploring issues like that to see how quickly we can get exports moving. Because of the importance of exports to the industry, which we have underlined, we will be keen to work closely with Government to make sure that is the case. I think the second issue is that, as soon as we have managed to get the agreement for the country to export, we have to make sure that we can get back into those markets as soon as possible. I think there are important issues to do with information, to getting positive messages about this industry, which is going to have good controls and is going to have excellence within it, in order to get over the positive message of what is happening in this industry to counteract what sadly are quite a lot of negative messages going around, particularly in other European countries at the moment.
  (Mr Howells) Chairman, if I may add to that. A part of the activity that we undertook on beef was to bring representatives of consumer associations, notably from France and Italy, over to see the premises, to see the plants, to see the recovery of the beef industry in this country. Because that is actually one of the big signals, when they go into a supermarket and see how much beef is being sold, they can hardly believe it, because the media overseas is actually representing the market in decline here rather than with a positive status.

Dr Turner

  553. I want to ask a supplementary on this £25 million programme which you say you cannot fund because of your lost income. I think there are some people who will want an answer to the question: Why is there not some cautionary funding available? Is it not the nature of your work that the time you are most likely to be needed to be most pro-active is when your income drops? Is it not remiss of you that you are not in a position to be saying that you are asking the Government to contribute rather than to fund this recovery project?
  (Mr Barr) I will let Gwyn again amplify my answer, if I may, but I think the very fact that beef is back to where it was pre-BSE and the amount that has taken, plus all the troubles in the pig industry, mean we have used up the kitty and that is unfortunate. And there was a reserve to deal with contingencies, we just have had rather more than we would reasonably have expected. I would take the chance, as you have given it, in answering that question, that I believe money spent quickly will actually save the country and economy a lot of money in the long term, because all of my experience has said: Get it up front. The MLC do not have the money but I think by spending that money now we will get the levies back, we will get the sales back, and it will be a much, much easier job than trying to catch it once shopping habits are broken. It would be much easier to reinstate.

Mr Drew

  554. What is your relationship like with the Food Standards Agency?
  (Mr Barr) I would think very positive. We very much respect their position and welcome the function. We certainly see ourselves very much that we will be a very, very consumer orientated operation. I would hope that we would be very much in line with their thinking.

  555. Would you accept, as a result of the current crisis, that you would be engaged in something of a major inquiry to look at options with regard to the human food chain and livestock farming? I mean, looking at extremes: banning import, for example. Or the other extreme would be learning to live with animal disease and maybe vaccinating or whatever.
  (Mr Barr) I think as far as the consumer is concerned we simply must develop a chain of complete integrity and no option. All of my efforts will be to look and the MLC to say, "How can we bring . . ." Our food industry is world class—you know, our wider food industry. The difference I probably see: I see farming as part of that 14 per cent to 16 per cent of our GDP and our biggest employer and we cannot have a tail end to the food industry. I very much see that that which is the norm elsewhere should be brought into farming.

  Mr Öpik: I apologise for my absence. I was drawn away by your arch rival the potato.


  556. It was to have his photograph taken.
  (Mr Barr) Vanity will out.

  Chairman: We can see the similarity.

Mr Öpik

  557. That is not parliamentary language! I want to ask about industry practices and restructuring. On page 4 of your memorandum you do discuss the two possible food chains. There may be an implication of additional red tape. What is your view? Would your proposals increase the bureaucracy and red tape applicable to farmers?
  (Mr Barr) Certainly my personal objective is the reduction of red tape. If you take something like the IT which is generally used in the food industry, that has taken a lot of paper and a lot of work out. If you took something like, say, electronic tagging, you would simply scan the animal. Part of this exercise has to be to release the farmer to farm. Good supply chains do not have a lot of red tape. It is rather like wire that keeps blowing: you have to put in a bigger fuse all the time to eliminate that. I think if we clearly identify the hazards we could then concentrate on that aspect which is the most dangerous. I would like to see a reduction of red tape. Anything we can do to simplify the system would be good news.

  558. Is it fair to say that one of your strategic goals would be to reduce bureaucracy rather than increase it in your restructuring plans?
  (Mr Barr) That certainly would be my personal objective, and simplifying the chain is the way to do that.

  559. I have two other quick questions. One is: "Restructuring" is a word which makes farmers nervous. Why do you feel it is necessary to do something as dramatic as to restructure the industry in order to achieve those goals you have just described?
  (Mr Barr) I wish we could find a better word than "restructure". There is a prize.

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